Executive Summary

LTE in South Korea touching 50% of mobile subscriber base as demand for data surges

South Korea has one of the world’s most active telecommunications and Information Technology markets backed by strong support from the government. Spending on ICT and high-technology equipment helped lead a transformation of the economy to one that is more progressively knowledge based. Having invested significantly in ‘basic’ telecommunications infrastructure over past decades, the country now has well developed submarine cable and satellite infrastructure as well as solid internet resources to support the growing demand for national and international communications. The government involvement continues with the aim of transforming the country into a knowledge-based information society in a ‘smart-age’.

The South Korean Government had a declared commitment to transition the country to digital terrestrial, digital cable and digital satellite TV broadcasting by 2012. The pressure created by convergence prompted South Korea to rewrite its regulatory arrangements for the broadcasting and communications sector. The operators continue to invest heavily in fibre based broadband deployments. As a result IPTV subscriptions have passed the 7 million mark as more content is available and the operators are able to compete more effectively with their own live broadcasts.

South Korea continues to be a booming mobile market as it innovatively explores the options for value-added services. The market passed the 110% penetration rate mark into 2013 with many individuals carrying at least one mobile phone. Having launched 3G networks in 2003, these had accounted for the majority of subscriptions. More recently, following the launch of 4G LTE services in 2011, this technology is quickly overwhelming the market and, coming into 2014, it had claimed 50% of the total mobile subscriber base. Not surprisingly, there has also been a rapid increase in smartphone adoption.

South Korea has the world’s highest number of broadband services per capita. Into 2014 over 38% of the population and around 95% of households were broadband subscribers. FttX accounted for over 60% of total subscriptions. Since 2006, Korea’s policy emphasis has been on completing a Broadband convergence Network (BcN) with wireline speeds of 50-100Mb/s per household and 1-2Mb/s on wireless connections. The plan moving forward has been for a UBcN (Ultra Broadband convergence Network) with 1Gb/s speeds on fixed lines and 10Mb/s on wireless by 2013.

The drive towards a ‘new economy’ has seen significant investments in Smart Infrastructure including Cloud Computing, Smart Grids and Smart Cities. The emergence of a National Strategy for Green IT has seen government promotion of new industry creation into 2018 such as 4G broadcasts and 3D and Smart television.

Market highlights:

Into 2014, fibre technology accounted for over 60% of all broadband subscribers in South Korea while ADSL subscriptions had declined to close to 10%, the balance being accounted for by cable modem subscribers;

Mobile penetration increased to 110%; Strong LTE demand was supported by the introduction of more smartphones into the market and has seen ARPU trend upwards;

LTE data usage is reported at least 50% higher compared with 3G at 1.6GB and 1.2GB respectively as reported by SK Telecom end June 2012. Samsung reports figures as high as 2.9GB of data on average a month compared with 1.2GB for 3G users;

LTE-Advanced testing continuing, with KT taking a lead role;

HD voice over LTE (VoLTE) was launched by SK Telecom;

Multi-carrier technology on 800MHz and 1.8GHz bands was launched in a world first

The introduction of MVNO services was starting to impact on the mobile market in 2013;

Spectrum auctions were held raising over US$1.5 billion for 10 year licence allocations;

WiFi and femtocell investments increased to reduce pressure on the core mobile networks;

A Smart Grid pilot is underway on Jeju Island with plans for a nationwide grid by 2030;

Green Economy initiatives are driving investments in Smart Cities.

Table of Contents

1. Key Statistics

1.1 Country Overview

1.1.1 South Korea’s economy

2. Telecommunications Market

2.1 Government support

2.2 ICT industry as an engine of economic growth

2.3 Communication industry revenue by type

2.4 Global rankings and South Korea

2.4.1 Government Broadband Index - EIU

2.4.2 Global Innovation Index – INSEAD

2.5 Telecommunications market sectors

2.5.1 Fixed-line and mobile services

2.5.2 Broadband in South Korea

3. Regulatory Environment

3.1 KCC – Overview and responsibilities

3.2 KCC – related laws

3.3 National Internet Development Agency of Korea (NIDA)

3.4 Policy overview

4. Major Operators

4.1 Overview of Major Telecom Operators

4.2 KT Corp

4.2.1 Company overview

4.2.2 Company background

4.2.3 KT Corp: Financial statistics

4.2.4 KT Corp: Operations statistics

4.3 SK Broadband

4.3.1 Company overview

4.3.2 Company developments

4.3.3 Company background

4.3.4 SK Broadband: Financial statistics

4.3.5 SK Broadband: Operations statistics

4.4 SK Telecom

4.4.1 Company overview

4.4.2 Company background

4.4.3 SK Telecom: Financial statistics

4.4.4 SK Telecom: Operations statistics

4.4.5 SK Telecom: LTE 2.0 plans

4.4.6 SK Planet

4.5 LG U+

4.5.1 Company overview

4.5.2 LG U+: Financial statistics

4.5.3 LG U+: Operations statistics

4.5.4 LG U+: “Beyond Telecom” initiatives

5. Telecommunications Infrastructure

5.1 National submarine cable infrastructure

5.2 International submarine cable infrastructure

5.3 Satellite infrastructure

5.4 Internet infrastructure

5.4.1 Internet eXchange (IX)

5.4.2 South Korea registered domains

5.4.3 IPv6

5.4.4 South Korea international internet bandwidth

5.5 Smart grids

5.5.1 Smart grid: new laws

5.5.2 Smart grid stages: 2010 - 2030

5.5.3 Five smart grid implementation areas

5.5.4 Jeju Island

5.6 Smart cities

5.6.1 New Songdo City

5.6.2 Busan

5.7 Infrastructure investment strategies

5.7.1 Infrastructure investment overview

5.7.2 Infrastructure investment stages of growth

5.7.3 Green IT in South Korea

5.7.4 Top 10 ICT focus areas: 2010 - 2018

5.7.5 New Technology Development

6. Internet Market

6.1 South Korea internet users

6.2 South Korea internet subscribers

6.3 South Korea ICT usage by household

6.4 Changes in the average internet user by activity– 2000 vs 2010, 2011

6.5 Distribution of internet users by region - 2010

6.6 Internet usage patterns

6.7 Internet usage by the socially disadvantaged

6.8 Internet media consumption

7. Broadband Market

7.1 Background

7.1.1 Broadband success criteria

7.2 Overview

7.3 Broadband statistics

7.4 Operator broadband subscribers

7.5 Broadband subscribers by access type

7.6 Bundled services usage rate by type

7.7 Broadband government targets

7.7.1 Broadband convergence Network

7.7.2 Ultra Broadband convergence Network

7.7.3 Broadband speed results

7.8 Broadband technologies

7.8.1 Overview

7.8.2 Cable modem

7.8.3 Digital Subscriber Line (DSL)

7.8.4 Apartment LAN

7.8.5 Fibre-to-the-Home

7.9 Wireless broadband

7.9.1 Wireless Local Area Network (WLAN)/Wireless Fidelity (WiFi)

7.9.2 WiBro

7.10 Voice over Internet Protocol (VoIP)

7.11 Broadband TV

7.11.1 Triple play background

7.11.2 Internet protocol TV (IPTV)

8. Digital Media / Digital Economy

8.1 Digital Economy

8.1.1 E-commerce

8.1.2 E-government

8.1.3 E-entertainment

8.1.4 E-Learning

8.1.5 E-services

8.2 Broadcasting

8.2.1 National television networks

8.2.2 Digital TV

8.2.3 Satellite TV

8.2.4 Cable TV (CATV)

8.2.5 Broadcasting deregulation

8.2.6 Nationwide Terrestrial 3D Broadcast

8.2.7 TV Music Streaming

9. Mobile Communications

9.1 Overview of South Korea’s mobile market

9.2 Background of South Korea’s mobile market

9.3 Mobile statistics

9.3.1 Mobile subscribers 1985 - 2013

9.3.2 Mobile subscribers by operator

9.3.3 Mobile ARPU by operator

9.4 Fourth mobile operator to enter market?

9.4.1 KMI

9.4.2 Kbiz

9.5 MVNOs

9.6 Spectrum auctions: 1.2GHz, 1.8GHz and 800MHz

9.7 Additional spectrum allocation

9.8 Mobile technologies

9.8.1 Analogue (AMPS)

9.8.2 Personal Communication Service (PCS)

9.8.3 Code Division Multiple Access (CDMA)

9.8.4 Wideband CDMA (WCDMA)

9.8.5 LTE

9.8.6 Voice over LTE (VoLTE)

9.8.7 LTE-Advanced (LTE-A)

9.8.8 Smartphones

9.9 Mobile data services

9.9.1 Market overview

9.9.2 Wireless Internet NIDA survey 2010

9.10 Mobile content and applications

9.10.1 Overview

9.10.2 M-commerce/m-payment

9.10.3 Mobile banking (m-banking)

9.10.4 Mobile government (m-government)

9.10.5 Apps Stores

9.10.6 Mobile advertising

9.10.7 NFC chips in smartphones

9.10.8 Mobile TV

9.10.9 Mobile learning

9.10.10 OTT Voice

10. Forecasts

10.1 Forecast Fixed-line subscribers – 2012 - 2013; 2017

10.2 Forecast Broadband subscribers – 2011 - 2012; 2017

10.3 Forecast Internet users – 2011 - 2012; 2016

10.4 Forecast: Mobile subscribers 2012- 2013; 2017

Table 1 – Country statistics South Korea – 2013

Table 2 – Telecom revenue and investment statistics – 2011

Table 3 – Telephone network statistics – March 2013

Table 4 – Internet user statistics – 2012

Table 5 – Broadband statistics – July 2013

Table 6 – Mobile statistics – September 2013

Table 7 – National telecommunications authorities

Table 8 – South Korea GDP real growth rate – 2008 - 2014

Table 9 – South Korea GDP and GDP per capita – 2000 - 2017

Table 10 – Growth of ICT industry – 2003 - 2010

Table 11 – Average growth rate per GDP and medium over 10 years from 2001 to 2010

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"Paul, May I congratulate you on a very successful and enjoyable afternoon with the Minister. In providing the roundtable discussions between government and industry, it highlighted the strong interest by stakeholders in Broadband and its implementation but it also presented us with other issues and opportunities that we need to address."